Shailly Nigam

(Prince Sattam Bin Abdulaziz University, Al Kharj, Kingdom of Saudi Arabia)

 

 

Abstract: In the wake of formation of BRICS, higher foreign capital influx in the economy and establishment of New Development Bank in Shanghai, it becomes imperative to assess the monetary policy of China vis a vis its objectives, and determine the steps needed to further ease the slower economic growth. More so, since China’s economy is not only bigger than the economies of all the other BRICS members put together, but also the most influential among them all. This paper evaluates the efficacy of Chinese monetary policy over a five year time period, measures the gap between the targets and the achievements, and determines the actions to be taken in order to fill this gap. A detailed time series analysis of relevant data for the years 2010 to 2014 was performed to assess the policy and observe its weaknesses through this time period. The research shows that despite immediate effects of even slight changes in the monetary policy, the expansionary moves took a long time to be initiated in order to have the much needed impact. Although these delays initially aggravated the economic slowdown but the recent moves have made the China’s monetary policy increasingly stimulatory for its economy which will have far reaching benefits for BRICS. Following an in-depth multi-dimensional analysis of the relevant data over years, some recommendations are also being made to improve the potency of the policy.

 

Key words: monetary policy; macroeconomics; development economics; BRICS; international economics

JEL codes: E52, E59, E60, E61, F41, F62, O53